Recovery and Growth in Transition Economies 1990–97: A Stylized Regression Analysis

September 1, 1998

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the determinants of growth in 25 transition economies during 1990–97. The paper’s main finding is that macroeconomic stabilization, structural reform, and reduction of government expenditures are key to achieving sustainable growth. Although the initial effect of reforms on output may be negative, over time the best growth performances are in those countries with the greatest progress in implementing reforms. The analysis also confirms that although adverse initial conditions hurt growth, their effect is small compared to the other factors.

Subject: Expenditure, Government debt management, Inflation, Labor, Macrostructural analysis, Prices, Public financial management (PFM), Structural reforms

Keywords: Baltics, Central and Eastern Europe, CIS country, country dummy, Eastern Europe, economic growth, effects estimate, Government debt management, Inflation, initial conditions of transition, low income, market economy, reforms, Structural reforms, sustainable growth, Transition and growth, transition country, WP

Pages:
37
Volume:
1998
DOI:
https://doi.org/10.5089/9781451928365.001
Issue:
141
Series:
Working Paper No. 1998/141
Stock No:
WPIEA1411998
ISBN:
9781451928365
ISSN:
1018-5941

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